Transposable elements (TEs), or transposons, play an important role in adaptation. TE insertion can affect host gene function and provides a mechanism for rapid increases in genetic diversity, particularly because many TEs respond to environmental stress. In the current study, we show that the transposition of a heat-activated retrotransposon, ONSEN, generated a mutation in an abscisic acid (ABA) responsive gene, resulting in an ABA-insensitive phenotype in Arabidopsis, suggesting stress tolerance. Our results provide direct evidence that a transposon activated by environmental stress could alter the genome in a potentially positive manner. Furthermore, the ABA-insensitive phenotype was inherited when the transcription was disrupted by an ONSEN insertion, whereas ABA sensitivity was recovered when the effects of ONSEN were masked by IBM2. These results suggest that epigenetic mechanisms in host plants typically buffered the effect of a new insertion, but could selectively "turn on" TEs when stressed.